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Dark nuclear-lobby money effects political changes in Ohio, and where next?

Support for HB 6 comes from beyond the state and reaches into some top levels of national politics.

The forces that passed Ohio’s subsidy law are poised for further action to shore up utilities and protect fossil fuel interests.

Dark money helped shift leadership in the General Assembly.Dark money dominated Ohio’s nuclear subsidy saga ENERGY NEWS NETWORK, Kathiann M. KowalskiMarch 5, 2020   “…………..Dark money groups such as Generation Now and the Growth & Opportunity PAC spent roughly $1 million in the 2018 election cycle. That election replaced Kasich with Mike DeWine as governor.

Other groups were also active, sometimes popping up for just a few months. At least one group launched a $100,000 negative ad campaign against an Ohio representative running in a congressional primary after she opposed subsidies for FirstEnergy.

The 2018 election also led to a leadership shift in the Ohio House of Representatives. Larry Householder, R-Glenford, the new speaker, proved to be a major force shepherding HB 6 through the General Assembly, even to the point of holding up a budget agreement last summer until the subsidy bill passed.

Dark money efforts while the bill was pending included advertising, coordination of bill testimony, and blocking a referendum effort that would have let voters reject HB 6 this November. Groups’ actions sparked critics to complain about misleading ads, alleged harassment of signature collectors, buyouts of petition workers, and even alleged assault.

At the end of the day, someone paid big money” for all those efforts, Hill said. “They didn’t do that [as] an un-self-interested contribution to a public policy debate.”

Groups’ efforts overlapped and linked with each other from before 2017 through the present.

Public reports reflect partial funding and cross-transfers among organizations whose backers remain secret.

Generation Now formed in 2017 as a tax-exempt organization under Section 501(c)(4) of the Internal Revenue Code. That code section covers a broad range of civic and “social welfare” organizations. An IRS filing identified its president/secretary as JPL & Associates, rather than a specific individual.

Generation Now gave $1,050,000 to the Growth & Opportunity PAC in 2018, which in turn ran ads and took other steps to support candidates who would favor Householder’s selection as House speaker, preparing the way for the subsidy bill. In 2019, Generation Now continued to spend money for pro-HB 6 ads and to discourage voters from signing referendum petitions. The total amount of its spending is not yet known.

Neither Generation Now spokesperson Curt Steiner nor Jeff Longstreth, a principal at JPL & Associates, responded to questions about the organization’s funding and its activities.

Unions reported giving $840,000 to Generation Now in 2018 and 2019. Generation Now also got money from other 501(c)(4) organizations, according to IRS filings. A group called Empowering Ohio’s Economy gave $100,000 to Generation Now in 2017 and another $50,000 for advocacy in 2018. That group also gave $200,000 for public advocacy to the Coalition for Growth & Opportunity in 2017, which in turn gave $59,000 to Generation Now over the course of 2017 to 2018.

The Coalition for Growth & Opportunity has also donated money to the Growth & Opportunity PAC. And it paid roughly $103,000 in 2018 for services from Communications Counsel, Inc., a public relations firm that has represented many Republicans in Ohio politics. Mark Weaver, a principal in the firm, is also an attorney with the Isaac Wiles law firm in Columbus. Other lawyers there filed incorporation papers and serve as registered agents for Ohioans for Energy Security. That group was formed on July 30, a week after Gov. DeWine signed HB 6.

When asked about that organization, Weaver said the law firm “represent[s] a wide range of political action committees and non-profit organizations” that have free speech rights and that its lawyers “follow the law and ethical rules in every respect.” He did not answer questions about the group’s funding.

As a for-profit entity, Ohioans for Energy Security doesn’t have to report its funding sources or spending. The group’s print and video ads featured a debunked Chinese conspiracy claim. The group also took part in some blocking activities related to the referendum, such as working to hire or otherwise “buy out” workers who had been hired to collect signatures from voters.

An affidavit filed in federal court in October provides a copy of a form contract for one of those proposed buyouts. The contracting party is shown as Ohioans for Energy Security. However, it said, any notices for Ohioans for Energy Security should go to Generation Now, care of Jeff Longstreth in Columbus.

Additional blocking efforts included the circulation of rival petitions, arranged by Ohioans for Energy Security. Those petitions had no binding value. Yet they looked enough like the real thing to cause some confusion, said critics, such as Hill.

“Under the shroud of disclosure loopholes, corporations can outright lie to voters without any accountability,” said Jen Miller, executive director of the League of Women Voters of Ohio. “This is particularly concerning about complex issues like Ohio’s energy policy, which ultimately will affect Ohioans economically and environmentally for years to come.”

Yet another group, Protect Ohio Clean Energy Jobs, bought Facebook ads urging people to remove their names from referendum petitions. Its treasurer, Alex Thomas, also played a coordinating role for the Ohio Clean Energy Jobs Alliance. The alliance’s website says it’s a “coalition of Ohio community leaders and organizations” and is “powered by FirstEnergy Solutions.” The spokesperson, Carlo LoParo, also acted as spokesperson and president for Ohioans for Energy Security.

LoParo did not answer questions about funding for either Ohioans for Energy Security or the Ohio Clean Energy Jobs Alliance.

FirstEnergy Solutions is connected to dark money groups through its spending and through several consultants and lobbyists.

Even before the July 2019 wire payment from FirstEnergy Solutions to Generation Now, its lobbyistsMatt Borges and Alex Thomas, then with Roetzel Consulting Services, worked behind the scenes for passage of HB 6. During that time, Thomas helped get organizations to sign on to a June 12 letter to the Ohio Senate Energy and Public Utilities Committee in support of HB 6. Committee records show that letter as coming from the Ohio Clean Energy Jobs Alliance.

Other FirstEnergy Solutions lobbyists and consultants coordinated efforts on HB 6. Among other things, materials in the FirstEnergy Solutions bankruptcy case reflected payments to help get the Ohio Clean Energy Jobs Alliance underway. A former FirstEnergy external affairs director, Murphy Montler, who is now deceased, was a consultant for FirstEnergy Solutions. He provided local public officials linked to the alliance with drafts of their testimony on HB 6.

Labor unions that provided funds to Generation Now also appear to have members who work at the Davis-Besse and Perry nuclear power plants. The political education arm of International Union of Operating Engineers, Local 18 gave $250,000 in 2018 and another $105,000 through November 2019. The AFL-CIO also ran anti-referendum ads in 2019. And an AFL-CIO affiliate gave $250,000 to Generation Now in 2018.

Meanwhile, employee “contests” at the Davis-Besse and Perry nuclear plants recruited workers as part of the Ohio Clean Energy Jobs Alliance’s “employee ambassador” program. FirstEnergy Solutions employees appeared in a pro-HB 6 ad presented by the Ohio Clean Energy Jobs Alliance.

At least two employees at FirstEnergy Solutions’ nuclear plants are also in a video ad from Ohioans for Energy Security. “Don’t sign the petition to allow China to control Ohio’s power,” the ad’s voiceover announcer said.

FirstEnergy Solutions’ spokesperson declined to answer questions about the company’s relationship with the nonprofits.

Law firm links also factor prominently in activities linked to HB 6.

Ohio Rep. Bill Seitz spoke out passionately for passage of HB 6. He’s also a lawyer at the Cincinnati office of Dinsmore & Shohl. And he’s on the board of ALEC, the American Legislative Exchange Council. The Charles Koch Foundation, the Charles Koch Institute and other fossil fuel interests have been funders of that organization, according to data from the Investigative Reporting Workshop’s Accountability Project.

Matthew Davis of the Dinsmore firm’s lobbying affiliate, DSD Advisors, was a registered lobbyist for FirstEnergy Solutions on HB 6. Lawyers with the Dinsmore firm are also acting as local counsel in the Murray Energy bankruptcy case. Murray Energy supplies coal for coal-fired power plants.

Documents from the Ohio Secretary of State’s office and the Internal Revenue Service also link attorney Eric D. Lycan of Lexington, Kentucky, to Generation Now, the Coalition for Growth & Opportunity, Inc., and the Growth & Opportunity PAC. Lycan declined to answer questions about funding sources for those organizations, but did provide copies of certain public filings for the organizations.

Lycan has been of counsel with the firm of Embry, Merritt, Shaffar, Womack, PLLC, since April 2019. For four years before that, however, Lycan was a partner with the Dinsmore firm’s Lexington office. That time period included times when money flowed through some of the organizations to others.

“I am pleased that several of my colleagues at Dinsmore supported HB 6 as I did,” said Seitz, who joined the firm in August 2014. However, he said it would be “ridiculous” to insinuate that there was anything improper about his vocal support for the bill because of his association with the firm.

“My support for the elements of HB 6 (end the mandates, support OVEC, support nuclear) predates HB 6 through legislation I co-sponsored in the last general assembly,” he said via email. Seitz also noted that he holds a salaried “of counsel” position and receives “no financial benefit whatsoever from the work our firm or its lobbying affiliate does.”

Executive Director Tony Bledsoe at Ohio’s Office of the Legislative Inspector General confirmed that there likely wouldn’t be an ethics violation for a hypothetical situation similar to the Dinsmore firm’s. The exceptions would be if a lawmaker personally did the lobbying work or had more than a 5% interest in a firm’s profits. Similarly, Bledsoe added, owning stock in the energy company that benefited from the bill wouldn’t be an ethics violation unless someone held more than a 5% ownership interest.

It’s less clear to what extent companies or organizations may choose lawyers or lobbyists based on a firm’s political connections and perceived influence, or whether firms attract or recruit people who are sympathetic to particular political perspectives.

Support for HB 6 comes from beyond the state and reaches into some top levels of national politics.

Lycan has also long been active in Republican party circles. Besides his current law firm position, he is general counsel for the Kentucky House Republican leadership. Previously he served as counsel for McConnell for Senate and chair of Lawyers for Team Mitch.

Generation Now’s IRS filing for 2017 names the president/secretary as JPL & Associates, a for-profit business, which has the same address and whose registered agent is Jeff Longstreth. He’s known as a Householder advisor and longstanding operative in Ohio Republican politics.

Empowering Ohio’s Economy, a Generation Now funder, lists its principal officer as Jo Ann Davidson in its 2018 filing with the IRS. She is also shown as the group’s secretary-treasurer/director on the filing. Davidson was speaker of the Ohio House of Representatives from 1995 to 2000. She spent four years as co-chair of the Republican National Committee.

The website for the American Crossroads super PAC shows Davidson as a member of its leadership team. Davidson also heads up JAD & Associates, a political consulting firm in Columbus. And the address shown for Empowering Ohio’s Economy is the same as that for the Jo Ann Davidson Ohio Leadership Institute. The organization provides training for women to run for public office or otherwise hold leadership positions in the Republican party. Questions to Davidson’s administrative aide there, Linda Dotson, have not been answered. J.B. Hadden, listed as president/director of Empowering Ohio’s Economy, likewise did not respond to questions for this article.

Borges, who acted as a lobbyist for FirstEnergy Solutions, also has strong political connections. He was chair of the Ohio Republican Party from 2013 through 2017, “guiding the most successful four year run the Party has ever had,” according to the website biography posted by his current firm, 17 Consulting. His name was even suggested as a possibility for national party chair in 2016, although the tension between Gov. Kasich and candidate Donald Trump likely made that a longshot. Borges’ colleague Thomas, also now at 17 Consulting, was a personal aide to Kasich during his campaign and continued to work in his administration afterward.

The forces that passed Ohio’s subsidy law are poised for further action to shore up utilities and protect fossil fuel interests.

Lawmakers who passed HB 6 continue to consider other pro-utility or pro-fossil-fuel bills. Those include a bill that could further increase utilities’ ability to use ratepayer funds to subsidize affiliates’ businesses, a plan to allow local referendums on wind farms after they’ve gotten all regulatory approvals, and a proposed constitutional amendment banning foreign ownership of “critical infrastructure.”

It’s also unclear whether Ohio lawmakers might try to retrench from the competitive regional capacity market and give further preferences to coal or nuclear generation. Under a federal regulatory ruling in December, the plants subsidized under HB 6 likely won’t qualify for capacity payments in the PJM market. Those payments by the regional grid operator compensate energy resources for promising to be available on demand for a set period, typically three years in the future.

Meanwhile, the maneuverings on HB 6 shed light on the bigger picture of dark money in state and federal politics.

“The two largest threats to American democracy are hyper-partisan gerrymandering and the Citizens United decision,” Hill said, “because the public does not know what economic interests are promoting different lines of argument.”

“Unfortunately, we cannot be fully sure how much money is being spent to lobby the legislature or during the electoral process, because Ohio has too many dark money loopholes,” said Miller at the League of Women Voters of Ohio. “Ohioans need to be able to follow the money so that they can better assess policy decisions made by their elected officials, as well as make more informed decisions at the ballot box.”

This story is part of a collaborative journalism project produced by Eye on Ohio, the Ohio Center for Investigative Journalism, the Energy News Network, the Accountability Project at the Investigative Reporting Workshop, and the Public News Service. Funding is provided by the Cleveland Foundation, the George Gund Foundation, and the Accountability Project. 

ABOUT KATHIANN M. KOWALSKI

Kathi is the author of 25 books and more than 600 articles, and writes often on science and policy issues. In addition to her journalism career, Kathi is an alumna of Harvard Law School and has spent 15 years practicing law. She is a member of the Society of Environmental Journalists and the National Association of Science Writers. Kathi covers the state of Ohio.   https://energynews.us/2020/03/05/midwest/dark-money-dominated-ohios-nuclear-subsidy-saga/

March 7, 2020 - Posted by | politics, secrets,lies and civil liberties, USA

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